Retailers turning the screw on suppliers to ease effects of pandemic
By Sarah Wood | 20th April 2020
Monsoon Accessorize is the latest in a string of retailers which has reportedly told suppliers it may need to cancel or reduce its autumn 2020 orders, to mitigate the impact of coronavirus.
The retailer's founder is said to have written to suppliers saying it is reviewing its position on existing and future orders for autumn/ winter stock and will let them know what it will be able to accept, based on business post-lockdown, as reported by Retail Gazette.
Monsoon Accessorize said it has received 90 per cent of its spring orders at full price, but asked suppliers to cancel the remaining 10 per cent - not received into its UK distribution centre by 19th March, just before lockdown started.
This follows the news that Asda is cancelling orders and telling suppliers of non-food items that it will pay just 30 per cent of an order's value. Asda has gone ahead with the move despite record food sales during lockdown - and the fact that the George clothing range is still on sale in stores, as reported by The Times.
Asda made pre-tax profits of £805 million last year and George is the UK's fourth biggest clothing brand.
Elsewhere, Primark has cancelled or suspended orders worth £256 million, while the Edinburgh Woollen Mill and Arcadia groups have also refused to pay the agree amounts for stock which has already been despatched.
UK clothing and footwear is set to be the sector worst by the COVID-19 pandemic, with 2020 spend expected to plummet by 26.1 per cent, according to GlobalData.
Chloe Collins, senior retail analyst at GlobalData, said: "We expect that offline clothing and footwear sales in 2020 will further contract, falling 33.6 per cent on the year, as the demand for fashion is increasingly decimated. We expect fashion stores in the UK to remain shuttered for a number of weeks once the lockdown is eventually lifted, and not begin reopening until June."
GlobalData predicts that even when stores are open, footfall will remain low, as consumers will be cautious about visiting crowded areas, and prioritise catching up with family and friends that they have been unable to see during lockdown.
Online fashion sales are only expected to fall by 7.9 per cent in 2020, but this won't be enough to offset the loss in spend from physical stores.
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